<PAGE>
                                                                   Exhibit 10.14


                              SETTLEMENT AGREEMENT

         This Settlement Agreement (the "Agreement") is made as of this 9th day
of July, 2004, by and between Alex Mashinsky ("Mashinsky") and
Arbinet-thexchange, Inc., a Delaware corporation (the "Company").

                                   WITNESSETH:

         WHEREAS, Mashinsky issued a promissory note in favor of the Company in
the aggregate principal amount of $236,475.61 dated January 2, 2000 (the
"January Promissory Note"); and

         WHEREAS, Mashinsky issued a promissory note in favor of the Company in
the aggregate principal amount of $38,155.00 dated April 30, 2000 (the "April
Promissory Note" and together with the January Promissory Note, the "Promissory
Notes"); and

         WHEREAS, the Company and Mashinsky amended the Promissory Notes
pursuant to the terms and conditions set forth in that certain Agreement (the
"Loan Amendment") by and between the Company and Mashinsky dated November 8,
2003, which, among other things, agreement extended the maturity date of the
Promissory Notes to March 6, 2005; and

         WHEREAS, Mashinsky and the Company desire that all amounts due to the
Company from Mashinsky under the Promissory Notes be paid in full; and

         WHEREAS, pursuant to the terms and provisions of this Agreement,
Mashinsky desires to transfer that number of shares (the "Shares") of the
Company's common stock, $0.001 par value per share (the "Common Stock"), with a
fair market value equal to the outstanding principal and accrued interest due
and payable under the Promissory Notes as of the date hereof, such number of
shares to be determined by dividing $352,427.86 (the "Loan Amount") by $1.16
(the fair market value per share) (and rounded up to the nearest whole share)
(i.e., 303,818 shares (the "Shares")) in full payment of the Loan Amount.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

         1. Repayment of the Promissory Notes.

         (a) Surrender of Shares. Subject to the terms and conditions hereof,
the Company hereby agrees to accept the Shares from Mashinsky and Mashinsky
hereby agrees to deliver the Shares to the Company, in full satisfaction of the
Loan Amount.

         (b) Closing. The delivery of the Shares and the other transactions
contemplated by this Agreement shall take place simultaneously with the
execution and delivery of this Agreement at the offices of Arbinet-thexchange,
Inc., 120 Albany Street, Tower II, Suite 450, New Brunswick, NJ 08901 on July 9,
2004 (the "Closing"), or, if otherwise agreed to by the Company and Mashinsky,
such other date, time and place as the parties shall mutually agree.

<PAGE>

         (c) Mechanics at Closing. At the Closing, the following shall occur,
which shall be deemed to take place simultaneously and none of the below shall
be deemed to have been completed or any document delivered until all of the
below have been completed and all required documents delivered:

                  (i)   Mashinsky shall deliver to the Company valid stock
certificates evidencing Mashinsky's ownership of the Shares, such certificates
to be held in escrow pursuant to Section 2 below.

                  (ii)  Mashinsky shall deliver duly executed stock powers
executed in favor of the Company.

                  (iii) The Company shall cancel the Promissory Notes.

         (d) Consulting Agreement and Surviving Obligations. If the Company
consummates a firm commitment underwritten public offering of its Common Stock
(an "IPO"),the parties agree that the consulting agreement between Mashinsky and
the Company dated November 8, 2003 ("Consulting Agreement") shall terminate as
of the date the IPO is consummated, and the covenants, agreements,
representations, and warranties of Mashinsky thereunder ("Surviving
Obligations") shall survive in accordance with the Consulting Agreement's terms.
The parties agree that the Company will make payments to Mashinsky under the
Consulting Agreement through the consummation date of the IPO, and that no
further notice is required to effect such termination. Notwithstanding anything
contained in the Consulting Agreement to the contrary, the Company agrees not to
terminate the Consulting Agreement for a period of four years from the date
hereof in the event the IPO is not consummated during such four year period and
to make appropriate payments to Mashinsky under the Consulting Agreement during
such four year period. Furthermore, the Company and Mashinsky agree that the
services to be rendered by him under the Consulting Agreement will be performed
by telephone conference, or any other means as agreed by both parties during
normal business hours and Mashinsky will not be required to spend more than
thirty hours during any calendar month in performing such services.

         (e) Representations and Warranties of Mashinsky. Mashinsky hereby
represents and warrants to the Company as follows:

                  (i)   Enforceability. This Agreement and any and all
agreements and documents to be executed by Mashinsky pursuant to this Agreement
and the transactions contemplated hereby, when executed and delivered by
Mashinsky, will constitute the valid, binding and enforceable obligation of
Mashinsky.

                  (ii)  Authorization; No Contravention. The execution, delivery
and performance of the obligations of Mashinsky hereunder (A) do not violate,
conflict with or result in any breach or contravention of, or the creation of
any lien under, any material contractual obligation of Mashinsky or any
requirement of law applicable to Mashinsky, and (B) do not violate any orders of
any governmental authority against, or binding upon, Mashinsky.

                  (iii) Governmental Authorization; Third Party Consents. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any governmental authority or any other person, and
no lapse of a waiting period under any

<PAGE>

requirement of law, is necessary or required in connection with the execution,
delivery or performance (including, without limitation, the delivery of the
Shares) by, or enforcement against, Mashinsky in this Agreement and each of the
other documents to which Mashinsky is a party or the transactions contemplated
hereby and thereby.

                  (iv) Ownership of Shares. Mashinsky is the lawful record owner
of the Shares, and of all rights thereto, free and clear of all liens, claims,
charges, encumbrances, restrictions, rights, options to purchase, proxies,
voting trust and other voting agreements, calls or commitments of every kind.

                  (v)   Acknowledgements. Mashinsky is fully aware of the
Company's business, operations and financial condition and has received or has
had full access to all of the information, including the Company's financial
statements, he considers necessary or appropriate to make an informed decision
with respect to the delivery of the Shares in satisfaction of the Loan Amount.

         Mashinsky has had the opportunity to ask questions of and receive
answers from the Company and its executive officers and financial and legal
advisors concerning the Company and he has been furnished with all documents and
other information about the Company which he has requested. Mashinsky believes
that he has been fully apprised of all facts and circumstances necessary to
permit him to make an informed decision relating to the delivery of the Shares
in satisfaction of the Promissory Notes, that he has sufficient knowledge and
experience in business and financial matters, is capable of evaluating the
merits and risks of the transactions contemplated hereby and has the capacity to
protect his own interest in connection with the transactions contemplated
hereby.

         Mashinsky acknowledges and agrees that the Company may experience
significant future growth, including in the immediate future, as a result of,
among other things, an initial public offering of its capital stock, a merger,
consolidation or acquisition of the Company into, with or by another entity, a
sale of the Company's assets or a strategic alliance or other business
arrangement. Mashinsky further acknowledges that, as a result of such
transactions or otherwise, there may be an increase, including immediately, in
the value of the Shares after the date of this Agreement for which, other than
as set forth in Section 3 hereof, Mashinsky agrees he shall not be entitled to
any such benefit.

         (f) Representations and Warranties of the Company. The Company hereby
represents and warrants to Mashinsky as follows:

                  (i)   Organization. The Company is duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Company has all requisite power and authority to execute and deliver this
Agreement and all other agreements which are ancillary hereto and to consummate
the transactions contemplated hereby and thereby.

                  (ii)  Authorization; Approvals. All corporate action on the
part of the Company necessary for the authorization, execution, delivery and
performance of all of the

<PAGE>

Company's obligations under this Agreement has been taken prior to the Closing.
This Agreement, when executed and delivered by or on behalf of the Company,
shall constitute the valid and legally binding obligation of the Company,
legally enforceable against the Company in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity). No consent, approval, order,
license, permit, action by, or authorization of or designation, declaration, or
filing with any governmental authority on behalf of the Company is required that
has not been, or will not have been, obtained by the Company prior to the
Closing in connection with the valid execution, delivery and performance of this
Agreement.

         2. Escrow. At the Closing, the Company shall place the Shares in
escrow, which Shares shall be held in escrow in accordance with the terms and
provisions hereof and in accordance with the following instructions:

         (a) Appointment. Mashinsky irrevocably authorizes the Company to
deposit with the Secretary of the Company any certificates evidencing the Shares
to be held by the Secretary of the Company and any additions and substitutions
to the Shares. Mashinsky does hereby irrevocably constitute and appoint the
Secretary of the Company as his attorney-in-fact and agent for the term of this
escrow to execute with respect to such Shares all documents necessary or
appropriate to make such Shares negotiable and to complete any transaction
herein contemplated.

         (b) No Rights as a Stockholder. Except as set forth in Section 3
hereof, Mashinsky will not be deemed to be a stockholder of the Company with
respect to the Shares for any purpose, nor will anything contained herein be
construed to confer upon Mashinsky, as such, any of the rights of a stockholder
of the Company with respect to the Shares while the Shares are held in escrow.

         (c) Escrow Period. The Shares shall be held in escrow from the date
hereof until such time as (i) some or all of the Shares are distributed to
Mashinsky, or (ii) the Shares are retained by the Company, each in accordance
with Section 3 below.

         3. Adjustment.

         (a) If the Company consummates a firm commitment underwritten public
offering of its Common Stock (an "IPO") by April 15, 2005 at a per share price
greater than $1.16 (as such price may be adjusted in the event of any stock
dividend, stock split, stock distribution, subdivision, combination,
consolidation or similar event), the Company shall return to Mashinsky that
number of Shares (the "Adjusted Shares") calculated by subtracting from the
Shares held in escrow an amount equal to the Loan Amount divided by the per
share price of the Company's Common Stock sold in the IPO. The Secretary of the
Company shall deliver the Adjusted Shares to Mashinsky within ten (10) business
days of the closing of the IPO and the Company shall retain those Shares
remaining in escrow. In the event that the Company consummates an IPO at a per
share price less than or equal to $1.16 (as such price may be adjusted in the
event of any

<PAGE>

stock dividend, stock split, stock distribution, subdivision, combination,
consolidation or similar event), there shall be no adjustment to the Shares
pursuant to this Section 3(a) and the Secretary of the Company shall retain and
cancel the Shares.

         (b) In the event that the Company fails to consummate an IPO by April
15, 2005, (i) Mashinsky may, in his sole discretion, request return of the
Shares in writing (the "Share Request") and repay the Loan Amount in cash on or
before April 20, 2005 (the "Settlement Date"), or (ii) if Mashinsky fails to
deliver the Share Request prior to the Settlement Date, the Company shall retain
the Shares.

         4. Consent to Amended and Restated Certificate of Incorporation.
Mashinsky hereby acknowledges and agrees that Mashinsky executed the Written
Consent of Stockholders of the Company on June 15, 2001 in connection with the
Company's Series E Preferred Stock Financing consummated on July 3, 2001 as a
holder of the majority of Company's Common Stock then outstanding to approve,
among other things, the filing of the Amended and Restated Certificate of
Incorporation and the adoption of the Amended and Restated By-Laws each as set
forth therein.

         5. Cooperation. Mashinsky agrees to cooperate fully with the Company
and any Committee of the Board of Directors of the Company, specifically
including any attorney retained by the Company or such Committee, in connection
with any pending or future litigation, business, intellectual property or
investigatory matter. The parties acknowledge and agree that such cooperation
may include, but shall in no way be limited to, Mashinsky making himself
available reasonably promptly for interviews by telephone during normal business
hours, and providing to the Company or any Committee any documents in his
possession or under his control relating to the litigation, business,
intellectual property or investigatory matter, or providing affidavits or
testimony or executing documents relating to the same. Mashinsky shall be
reimbursed for any reasonable out-of-pocket expenses incurred by him.

         6. Miscellaneous.

         (a) Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement.

         (b) Further Assurances. Each of the parties hereto shall perform such
further acts and execute such further documents as may reasonably be necessary
to carry out and give full effect to the provisions of this Agreement and the
intentions of the parties as reflected thereby.

         (c) Governing Law; Jurisdiction. This Agreement shall be governed by
and construed according to the laws of the State of New Jersey, without regard
to the conflict of laws provisions thereof. Any dispute arising under or in
relation to this Agreement shall be resolved in a competent court in the State
of New Jersey, and each of the parties hereby submits irrevocably to the
exclusive jurisdiction of such court.

         (d) Successors and Assigns; Assignment. Except as otherwise expressly
limited herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors, and administrators of
the parties hereto. None of the rights, privileges,

<PAGE>

or obligations set forth in, arising under, or created by this Agreement may be
assigned without the prior consent in writing of each party to this Agreement.

         (e) Entire Agreement. This Agreement, the Consulting Agreement as
modified herein, and the Surviving Obligations contain the entire understanding
of the parties hereto, and shall be binding on the parties hereto, their
parents, subsidiaries, affiliates, heirs, executors, administrators and assigns.
The above are the only agreements between the parties with respect to the
subject matter hereof and shall not be modified or varied by oral
understandings. Any term of this Agreement may be amended and the observance of
any term hereof may be waived only with the written consent of the Company.

         (f) Notices, etc. All notices and other communications required or
permitted hereunder to be given to a party to this Agreement shall be in writing
and shall be telecopied or mailed by registered or certified mail, postage
prepaid, or otherwise delivered by hand or by messenger, addressed to such
party's address as set forth below or at such other address as the party shall
have furnished to each other party in writing in accordance with this provision:

           if to Mashinsky:         515 Sutton Place, Memphis, TN 38120

                                    with a copy to:

                                    Joseph L. Cannella, Esq.
                                    Fischbein Badillo Wagner Harding
                                    909 Third Avenue
                                    New York, New York 10022
                                    Fax: (212) 644-3601


           if to the Company:       Arbinet-thexchange, Inc.
                                    120 Albany Street, Tower II, Suite 450
                                    New Brunswick, New Jersey 08901
                                    Facsimile: (732) 509-9101
                                    Attn: General Counsel

                                    with a copy to:

                                    David J. Sorin, Esq.
                                    Morgan, Lewis & Bockius LLP
                                    502 Carnegie Center
                                    Princeton, New Jersey  08540
                                    Facsimile:  (609) 919-6639

or such other address with respect to a party as such party shall notify each
other party in writing as above provided. Any notice sent in accordance with
this section shall be effective (a) if mailed, five (5) business days after
mailing, (b) if sent by messenger, one (1) business day after delivery, and (c)
if sent via telecopier, one (1) business day after transmission and electronic
confirmation of receipt or (if transmitted and received on a non-business day)
on the second business day following transmission and electronic confirmation of
receipt (provided, however, that any notice of change of address shall only be
valid upon receipt).

         (g) Delays or Omissions. No delay or omission to exercise any right,
power, or remedy accruing to any party upon any breach or default under this
Agreement, shall be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent, or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth

<PAGE>

in such writing. All remedies, either under this Agreement or by law or
otherwise afforded to any of the parties, shall be cumulative and not
alternative.

         (h) Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable under applicable law, then such
provision shall be excluded from this Agreement and the remainder of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms; provided, however, that in such
event this Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning and
intention of the excluded provision as determined by such court of competent
jurisdiction.

         (i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and enforceable against
the parties actually executing such counterpart, and all of which together shall
constitute one and the same instrument.

         (j) Termination of Loan Amendment. The Loan Amendment is hereby
terminated and shall be of no further force and effect.

         (k) Legal Review. All parties to this Agreement have had an opportunity
to review this Agreement and to obtain independent legal counsel to review this
Agreement.

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
as of the date first above written.

                                         ARBINET-THEXCHANGE, INC.

                                         By: /s/ J. Curt Hockemeier
                                            -------------------------------
                                            Name: J. Curt Hockemeier
                                            Title: President and Chief Executive
                                                     Officer

                                             /s/ Alex Mashinsky
                                            ----------------------------------
                                             Alex Mashinsky